Latest & Greatest Registered Tax Return Preparer Regulations

So you wanna be a tax preparer?  Kind of sounds like a game show, eh?  All kidding aside, the IRS is continually getting closer and closer toward coming up with a solid game plan for an individual to follow in order to prepare taxes for compensation.  Like the tax code itself, their game plan is becoming more and more riddled with caveats and exceptions.  We will be the first to admit that the tax preparation industry needed regulation worse than Kim Kardashian needs a man that loves her for her and not just for her marvelous posterior view.  However, does the IRS really need to complicate these regulations so much?  We guess that is like asking if the Donald needs a new toupee.

The new regulations for paid tax preparers is being rolled out in two phases.  Stay with us and let’s see if we can keep this as short and simple as possible.

Phase 1:  PTINs for everyone

Starting on Jan. 1st, 2011, all paid preparers needed to sign up for a PTIN, or Preparer Taxpayer Identification Number for the layman.  If you haven’t done this already, we don’t recommend doing this via the paper process on Form W-12 or it could take up to 4-6 weeks.  Simply go online and it typically takes about 15 minutes, PTIN registration.  Plan on dropping $64.25 for the PTIN.

PTIN renewal is annual.  Thus, if you received your PTIN in 2011 (doesn’t matter when in 2011), you will have to renew it before Jan. 1st, 2012.

Phase 2:  Fingerprinting/Background Checks, Testing, and Continuing Education for some preparers  

  1. Attorneys, CPAs, and Enrolled Agents don’t have any additional requirements other than to renew their PTIN annually, assuming that their license is active and in good standing.  Well ain’t they just special!
  2.  Supervised preparers and non-1040 preparers will need to renew their PTIN annually and submit fingerprints for a background check
  3. All other preparers will have to:
  • Renew their PTIN annually
  • Submit fingerprints for a background check (expected to start in Oct. 2011)
  • Pass a Competency Exam (expected to be first administered through Prometric in Oct. 2011), which will be a piece of cake with the Tax Preparer Study Guide
  • Take 15 hours of continuing education annually (expected to start in 2012)

*Those who already are fortunate enough to have a PTIN will have until Dec. 31st, 2013 before having to pass the Competency Exam and background check.

Check out the IRS’s website for a handy dandy chart which outlines these requirements.



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